Shanghai, May 25, 2004 — The International
Finance Corporation, the private sector arm of the World Bank Group, agreed
to provide up to $35 million in financing to Xinao Gas Holdings and its
subsidiaries. IFC will provide up to $25 million in debt financing to three
Xinao Gas Holdings Limited subsidiaries operating in Shijiazhuang, Hebei
province, Bengbu, Anhui province, and Xiangtan, Hunan province. IFC
will also invest up to $10 million in Xinao’s equity.
Established in 1993, Xinao is one of China’s first private gas distribution
companies. As part of the agreement, IFC plans to help Xinao develop a
formal environmental and social management system to support its continued
growth. IFC’s debt financing will be used to develop and expand Xinao’s
gas distribution infrastructure in the three cities, including the construction
and rehabilitation of gas processing plants, the installation of gas distribution
pipelines, and the installation of supervisory control and data acquisition
systems.
Francisco Tourreilles, IFC’s Infrastructure Department Director, said,
“We are very pleased to be able to work with a leading private Chinese
gas distribution company and contribute to China’s efforts to promote
the use of natural gas and improve the environment. This project
will have a significant development impact by helping reduce air pollution
through the substitution of coal energy with natural gas, and improving
access to a clean, low cost and reliable energy source.” Javed Hamid,
IFC's Director for East Asia, added, “IFC’s investment will lend credibility
to other local firms seeking international funding in the Chinese gas distribution
market, as well as the broader infrastructure market.”
Mr. Wang Yusuo, Chairman and Managing Director of Xinao, commented, “This
partnership with IFC, a member of the World Bank Group and one of the world’s
most respected financial institutions, is a significant milestone in Xinao’s
development. We look forward to working closely with IFC to develop Xinao’s
existing and new projects and refine Xinao’s management and environmental
systems to ensure future growth.”
Xinao currently operates gas distribution networks in 43 cities under exclusive
operating licenses across 12 provinces/municipalities in eastern and northern
China, covering a total connectable urban population of 19.6 million people.
Xinao is also developing the natural gas transportation sector by
converting vehicles from gasoline to compressed natural gas (CNG) power
and servicing such vehicles through a growing network of CNG fueling stations.
The mission of IFC is to promote sustainable private sector investment
in developing countries, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the developing world,
mobilizes capital in the international financial markets, helps clients
improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY03, IFC has committed more than $37 billion of its own
funds and arranged $22 billion in syndications for 2,990 companies in 140
developing countries. IFC's worldwide committed portfolio as of FY03 was
$16.8 billion for its own account and $6.6 billion held for participants
in loan syndications.